American Politics Has Always Been Partisan; American Policy Not so Much...
Tail Risks

Brad Setser: Can Anyone Other than the U.S. Fund a Current Account Deficit These Days?: "To exaggerate a bit, the world may soon only have one borrower...

...In some sense that’s a safe equilibrium: the United States borrows in dollars, so it is less exposed to the risks created by the Fed’s monetary tightening and a rising dollar than others. Exorbitant privilege and all. In another sense though it is a disappointment: the United States already has a lot of external debt, it doesn’t really need any more.  And it would be globally healthier if the savings of aging Europe and aging Japan and aging Korea and slow growing Taiwan flowed to the world’s young and potentially rapid growing emerging economies, not to fund inequality increasing tax cuts in the United States…


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